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Olaopa Seeks National Waste Reduction Strategy
The Chairman, Federal Civil Service Commission ( FCSC) , Prof. Tunji Olaopa, has called for a waste reduction strategy to boost national productivity.
He made the call at the National Productivity Summit of the National Productivity Centre held in Abuja on Wednesday.
Olaopa who described productivity as unarguably a key indicator of the economic health of a country and is therefore core critical to policy calculations said that the objective of national productivity resides in the need to achieve a high volume of qualitative output with the least expenditure of resources.
But he lamented that the general theory is that productivity in Nigeria is generally low compared to high-performing comparators like the Asian Tigers, while the productivity in the private sector is higher compared with the public sector.
The Interior Minister Olubunmi Tunji-Ojo and Prof. Tunji Olaopa on the first day of the event . PHOTO: POPOOLA TIMOTHY
Noting that this low productivity is generally viewed as a labour problem, he disclosed that the labour productivity measure is however the traditional productivity approach.
He said: “The focus in productivity conversation weighs more towards total factor productivity. This involves increased value-adding wealth creation dynamic than the minimisation of labour input. Either way, the role of the human factor in the production or service delivery processes is taken as a key determinant of productivity improvement.
“In other words, that availability of a capable workforce along with technological advancement are considered core critical to economic growth. As it’s however evident from the cost of governance crisis that governments in Nigeria are contending with, it is obvious that the critical challenge for development management and doing business is one of harnessing resource efficiency to accelerate
economic growth.”
Prof. Tunji Olaopa and the Director -General/CEO of the National Productivity Centre Dr Nasir Olaitan Raji-Mustapha . PHOTO: POPOOLA TIMOTHY
According to him, the crisis also manifests in terms of balancing the rate of investment with the return on that investment. He said that the first indicator of Nigeria’s low productivity level is in the discrepancy between Nigeria’s productive capacities at the heart of the slow rate of economic diversification, and the country’s debilitating consumption patterns. This debilitation has taken the country to the unenviable point at which it imports and consumes products in which it has comparative advantage and which it can therefore produce.
“This is one of the most significant and counterintuitive occurrences in Nigeria’s development trajectory as there is no country that achieves any real and sustainable development by depending essentially on others to produce what it consumes.
“The second issue at the heart of Nigeria’s productivity deficit is a patent low marginal productivity of labour measured by the average output of the workforce in Nigeria. And thirdly, is the factor of the productivity of the public service in Nigeria, accentuated by the fact that the Nigerian government is the single largest employer of labour and provider of services in the economy
And with the extent of tax resources involved in government investment, the causal relationship between service delivery, performance and productivity becomes a defining issue in the development process.
“In the production process, labour and capital is taken to complement each other. With regard to the determinants of labour productivity we are talking of a mix of skills, competence and knowledge as human capital and the technology available as capital endowment that an average worker has access to in Nigeria. Then we need to consider the state of infrastructure which is an indirect input in the production process. As long as infrastructure is poor and capital endowment is low, the end point will always be low level of productivity.”
Noting the role of technology in the development process, Olaopa said that technology can be acquired or developed at three levels. One is as a product of research and development (R&D), technology transfer, and adoption of new technology.
But he lamented that Nigeria’s capacity to harness these three broad areas have been found to be quite limited .He said that R&D remains one of the weakest links in Nigeria’s development process, with the impact of FDI still restricted.
“The weak linkage between the oil sector and the rest of the economy has for instance hindered any significant spill-over effect from the oil and gas sector. Low private capital investment has prevented firms from being able to replace ageing capital stock that embodies new and more efficient technology”, he said.
“Education quality and brain drain have also impacted on the quality of human capital. Local production has proved to be hindered by poor quality, unreliability and high cost of infrastructures as constraints to competitiveness. As domestic firms depend primarily on bank finance for working capital and investment, the high cost of funds leaves them with high capital costs. Indeed, the small and micro level firms are almost completely left out of the formal credit market”, he added.
According to Olaopa, accelerating national economic growth will no more depend on the quantum of government spending on development programmes, it will require at once disciplined policy execution that balances the rate of investment in development projects with return on those investments.
He said that even at the level of the national values in society, Nigerians are basically a very wasteful people. “I refer to the pervasive culture where an average Nigerian likes to show off and celebrates everything – funerals, birthdays, graduation, new houses, marriages, promotion, everything; and never in any way modest, but with unbridled extravagance”, he said.
He added : “In sum, it is so very clear that many drivers of the nation’s national productivity, be it service delivery, programme and project management, resource use efficiency, etc. require recalibration. The required national cultural adjustment must necessarily extend to the nation’s work culture and labour standard, work method, skills pricing, pay and reward system; productivity metrics, research and development, talent and knowledge management, and I can go on and on.”
Olaopa said that at the level of the state system and the public service, the point cannot be overemphasized if one says that the Nigerian state cannot be developmental if it is so very capable of being the generator of institutional wastes, redundancies and pointless costs being carried as public finance and budget overheads by MDAs.
“What productivity can ever exist for example in a public service with a workforce structure where too many people are doing nothing, too many doing too little, while too few are doing too much?
“Indeed, the political science literature is replete with evidence of the magnitude of costs and redundancies that Nigeria has generated by its peculiar brand of federalism, presidentialism, electoral system and diversity management praxis. There is of course the opportunity costs incidental on how the dynamics of the implementation of the federal character has undermined meritocracy and the institutional capacity deficits and obsolescence incidental.
“There are redundancies created by the unconscionable practice whereby every agency irrespective of cost implication, must have offices in all the states of the federation and even LGAs, without the consideration of how technology can be leveraged for ‘joined up’ cost saving governance cum institutional networking and outsourcing.
” All considered, the job of the National Productivity Centre is cut out for it, especially in generating ideas and models that could help the government in getting a handle on resolving the unsustainable cost of governance, while at once creating the narratives and scripts for institutions like the National Orientation Agency (NOA) in their national values reorientation drives.
“Going forward, there is the imperative need to launch a national waste reduction strategy that should necessarily commence with:
the unbundling of the expenditure structure of government to free resources for investment in real development; this will require productivity audit of MDAs and deletion of very many revenue generating agencies and those that ought to be self-financing from budget, in measures that reinforce a cautious implementation of the Oronsaye Panel report.
“We must get MDAs to articulate their productivity cum waste reduction plans based on agreed national benchmark;
And this should challenge the professionalism of the National Productivity Centre to refine and launch new set of productivity metrics and tools for holding MDAs accountable to national productivity targets which must be admitted into the national development plan. In this regard, the launch of a complementary new national assets cum facility management and national maintenance system will be core critical.”
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